Forget Blockchain: Here Comes Quantum Computing

Satya Nadella, the CEO of Microsoft (MSFT), gave the stark warning that the world is rapidly “running out of computing capacity”. He said the problems the world faces today need superfast quantum computers to solve them, explains Tony Daltorio, editor of Investors Alley's The Market Cap.

As the head of the company’s quantum computing team, Todd Holmdahl, said to the Financial Times, “We have an opportunity to solve a set of problems that couldn’t be solved before. On a classical computer, they would take the life of the universe to solve.”

This is breakthrough technology that will change our world, making quantum computing a topic worth revisiting. Building a quantum computer has stumped scientists and engineers for about 35 years due to the complicated physics involved.

Qubits, the basic units of quantum information, are highly susceptible to ‘noise’ and therefore error. For qubits to be useful, they must achieve both quantum superposition (a property something like being in two physical states — 0 and 1 in computing — simultaneously) and entanglement (a phenomenon where pairs of qubits are linked so that what happens to one can instantly affect the other, even when they’re physically separated).

These delicate conditions are easily upset by the slightest disturbance, like a slight vibration or a fluctuating electric field.

Quantum computers will be particularly suited to factoring large numbers (making it easy to crack many of today’s encryption techniques and probably providing uncrackable replacements), solving complex optimization problems, and executing machine-learning algorithms. And there will be other applications no one has yet even thought about.

The cracking of encryption techniques may even push current blockchain technologies to the dustbin of history quickly. Indeed, the greatest threat to blockchain out there is not regulations — it’s quantum computers.

Much of the allure of blockchain comes from its security benefits. The technology allows a ledger of transactions to be distributed between a large network of computers. No single user can break into and change the ledger, making it both public and secure. Public key cryptography uses a pair of keys to encrypt information: a public key which can be shared widely and a private key known only to the key’s owner.

Even if today’s supercomputers tried to figure out what the private key is, it would take it an estimated 785 million times longer than the age of the universe. In other words, it’s impossible. But with quantum computers possibly 100 million times faster than classical computers, they could possibly break today’s public key cryptography, rendering the blockchain technology that relies open to hacking and obsolete.

Until now, scientists have only been able to build fully programmable five-qubit computers and more fragile 10- to 20-qubit test systems. Neither kind of machine is capable of much. But the head of the quantum computing effort at Alphabet (GOOG), Harmut Neven, says his team is on target to build a 49-qubit system perhaps within a year.

That would be close to the minimum target set by scientists of around 50 qubits. This 50 qubit target isn’t an arbitrary one. It’s a threshold, known as quantum supremacy, beyond which no current supercomputer would be capable of handling the exponential growth in memory and communications bandwidth needed to simulate its quantum counterpart.

In other words, the top supercomputer systems can currently do all the same things that five- to 20-qubit quantum computers can do, but at around 50 qubits this becomes physically impossible — and we are indeed seeing breakthroughs in quantum computing.

Efforts from companies like International Business Machines (IBM), Google and Microsoft make quantum computers likely and commercially viable within several years. Previous estimates were that quantum computing was still decades away.

But Microsoft and Google are showing hat the frontiers of theoretical physics are quickly being turned into practical reality. IBM has been a pioneer in the field and actually achieved a working qubit in 1998. It announced in December a long list of partners to help it develop practical applications for the technology. The partners include a number of universities, government research institutions and major companies.

I would say that IBM is ahead of Google in that it has already programmed a supercomputer to simulate a quantum machine with more than 50 qubits. A feat, I might add, most did not think was possible.

Both Microsoft and IBM are offering simulations of quantum computers that run on today’s “classical” machines, while IBM is also giving its partners access to a rudimentary quantum system.

Now let’s focus on Microsoft, which began working on producing a working qubit (quantum bit) 12 years ago. And now finally, it is “imminently close” to announcing that it has reached that goal.

I find Microsoft the most interesting of the three leaders in quantum computing because of the unique approach it is taking. It apparently has developed a type of qubit that effectively fragments electrons. That means the same piece of information is held in multiple places at the same time. If one part of the qubit goes through quantum decoherence, the information it contained is not lost.

This will likely lead to a more stable system than its competitors’ systems. Microsoft will likely need only one qubit compared to 1,000 or 10,000 (mainly unstable) qubits.

For me, if Microsoft does indeed reveal that working qubit, it will place them ahead in the race for quantum computing supremacy. It would be my choice as a major future beneficiary of quantum computing.